| dc.description.abstract | The purpose of the study was to investigate the relationship between the application of
internet banking and financial performance of commercial banks in Kenya for a period of
10 years. Kenya’s financial sector has undergone significant financial innovations in the
last few years. Many new more efficient and real time financial systems have come into
place with the adoption and application of internet banking. Despite the undeniable
importance of internet banking adoption and application, its effect on financial
performance is not always obvious since there are reported cases of reverse causality
between internet banking application and financial performance. Descriptive research
design was used to carry out this study. The population of study was all the 43
commercial banks in Kenya as at 30th December 2013. The study used secondary data
from published central banks’ annual reports and the EFT settlement reports for every
clearing centre as generated by the Kenya Bankers’ Association. The independent
variables were internet banking, bank size and efficiency ratio while dependent variable
was financial performance of the banks measured by their Return on Equity. The
relationship between the dependent variable and the independent variables was
determined by use of linear regressions. Study results indicated that internet banking is
positively correlated to financial performance of commercial banks in Kenya. It also
indicated that the independent variables (Internet banking, Bank Size and Efficiency
Ratio) explain and can predict financial performance of commercial banks in Kenya. The
variables could explain 95.6% of the variation in profits in the commercial banks and
only 4.4% of the variation in profitability in the banking sector could not be explained by
the model used. | en_US |
